Hudbay Minerals Inc.

SUMMARY

Delivered Strong Second Quarter Financial Results; Production Reaffirmed and Cost Guidance Improved

• Achieved revenue of $536.4 million and adjusted EBITDA 1 of $245.2 million in the second quarter of 2025.

• Strong financial results were driven by attractive operating cost margins and significant exposure to copper and gold across Hudbay's diversified operating portfolio.

• Steady production continued into the second quarter with consolidated copper production of 29,956 tonnes and consolidated gold production of 56,271 ounces.

• Industry-leading cost performance continued in the second quarter with consolidated cash cost 1 and sustaining cash cost 1 per pound of copper produced, net of by-product credits, of $(0.02) and $1.65, respectively.

• Reaffirmed full year 2025 consolidated production guidance of 117,000 to 149,000 tonnes of copper and 247,500 to 308,000 ounces of gold.

• Improved full year 2025 consolidated cash cost 1 guidance to $0.65 to $0.85 per pound from $0.80 to $1.00 per pound, as year-to-date results are trending well below the low end of the cost ranges due to increased exposure to gold by-product credits and continued strong cost control across all operations.

• Peru operations produced 21,710 tonnes of copper and 7,366 ounces of gold in the second quarter, in line with quarterly cadence expectations, despite lower average mill throughput of approximately 83,100 tonnes per day due to a planned semi-annual mill maintenance shutdown in the second quarter. Peru cash cost 1 per pound of copper produced, net of by-product credits, was $1.45 in the second quarter, in line with the annual guidance range.

• Manitoba operations produced 43,235 ounces of gold in the second quarter, slightly lower than quarterly cadence expectations as a result of a temporary shutdown of operations due to wildfire evacuation orders, partially offset by continued strong gold grades at Lalor and mill throughput outperformance at New Britannia. Manitoba cash cost 1 per ounce of gold produced, net of by-product credits, was $710 in the second quarter, in line with the annual guidance range.

• British Columbia operations produced 6,634 tonnes of copper at a cash cost 1 per pound of copper produced, net of by-product credits, of $2.39 in the second quarter, reflecting efficiency benefits from Hudbay's optimization initiatives.

• Second quarter net earnings attributable to owners and earnings per share attributable to owners were $117.7 million and $0.30, respectively, a 17% and 20% increase, respectively, compared to the first quarter of 2025 and a significant increase compared to the second quarter of 2024, driven by higher gross margins and strong cost control. After adjusting for various non-cash items, second quarter adjusted earnings 1 per share attributable to owners was $0.19.

• Cash and cash equivalents increased by $62.9 million to $625.5 million during the second quarter and total liquidity 2 was $1,050.2 million as at June 30, 2025.

Continued Free Cash Flow Generation Driving Further Debt Reduction and Balance Sheet Resilience

• Hudbay's unique copper and gold diversification across its operations provides exposure to higher copper and gold prices, which together with a focus on cost control across the business, continues to expand margins and generate attractive free cash flow 1.

• While the majority of revenues continue to be derived from copper production, gold represented more than 36% of total revenues in the second quarter of 2025.

• Delivered the eighth consecutive quarter of meaningful free cash flow 1 generation with $87.8 million achieved during the second quarter of 2025, resulting in more than $400 million in annual free cash flow 1 over the last twelve months.

• Achieved adjusted EBITDA 1 of $245.2 million in the second quarter of 2025, resulting in record annual trailing twelve-month adjusted EBITDA 1 of $995.9 million.

• Repurchased and retired an additional $50 million of senior unsecured notes through open market purchases at a discount to par during the second quarter, reducing total principal debt to $1.07 billion as of June 30, 2025.

• Approximately $295 million in total debt repayments and gold prepayment liability reductions have been achieved since the beginning of 2024.

• Net debt 1 significantly reduced to $434.1 million as at June 30, 2025 compared to $525.7 million at December 31, 2024, a decrease of $91.6 million in the first half of 2025.

• Net debt to adjusted EBITDA ratio 1 was 0.4x at the end of the second quarter of 2025, an improvement from 0.6x at the end of the first quarter of 2025 and 0.8x at the end of the second quarter of 2024. This is the lowest net leverage level achieved since Hudbay developed Constancia over a decade ago.

• Current balance sheet expected to be further enhanced with proceeds from the $600 million Copper World joint venture transaction, as mentioned below. On a pro-forma basis, as at June 30, 2025, this would increase cash and cash equivalents to more than $1.0 billion and total liquidity to more than $1.5 billion, while reducing net debt 1 to zero.

Prudently Advancing Copper World with Accretive Minority Joint Venture Transaction, Enhanced Stream Transaction and Successful Achievement of "3-P" Plan

• Announced $600 million Copper World joint venture transaction with Mitsubishi Corporation ("Mitsubishi") for a 30% minority interest ("JV Transaction").

◦ Implies a significant premium to consensus net asset value for Copper World 3.

◦ Mitsubishi's $600 million initial investment will consist of $420 million at closing and $180 million within 18 months of closing.

◦ Mitsubishi will also fund its pro-rata 30% share of future equity capital contributions.

◦ Increases levered project IRR to Hudbay to approximately 90% based on pre-feasibility study ("PFS") estimates 4.

• Secures a premier long-term strategic partner in Mitsubishi, one of the largest Japanese trading houses with a global mining presence and a significant U.S. based business.

◦ Mitsubishi is the strategic partner of choice with investments in a world-class portfolio of large and high-quality copper assets, including five of the top twenty copper mines globally by 2024 production.

◦ Mitsubishi's wholly owned U.S. subsidiary, Mitsubishi Corporation (Americas), has over 50 subsidiaries and affiliates across various business sectors, including mineral resources, oil & gas, real estate, mobility, food, power, etc., and manages the company's strategic investments with approximately $9 billion in total assets and trading businesses in North America, which encompass trading activity with a substantial volume of copper, precious metals, and aluminum in the U.S. market.

◦ Strategic partnership validates the attractive long-term value of Copper World as a world-class copper asset and endorses the strong technical capabilities of Hudbay.

• Agreed on terms with Wheaton Precious Metals Corp. ("Wheaton") to amend the existing precious metals streaming agreement.

◦ In addition to the initial $230 million stream deposit, provides an additional contingent payment of up to $70 million on a future potential mill expansion recognizing the long-term potential at Copper World.

◦ Ongoing payments for gold and silver amended from fixed pricing to 15% of spot prices to provide upside exposure to higher precious metals prices.

◦ Updated structure aligns with the current development plan for Copper World and the joint venture agreement.

• Successfully completes key elements of Hudbay's prudent financial strategy as part of the three prerequisites ("3-P") plan for Copper World with the announcements of the JV Transaction and the enhanced Wheaton stream, together with the achievements of stated balance sheet targets.

◦ Before accounting for proceeds from this Transaction, Hudbay had achieved more than $600 million of cash and cash equivalents and a 0.4x net debt to adjusted EBITDA ratio 1, as of June 30, 2025, far exceeding the stated balance sheet targets.

◦ The Mitsubishi initial investment and its pro-rata equity capital contributions, together with the amended Wheaton stream, provide significant financial flexibility by reducing Hudbay's estimated share of the remaining capital contributions to approximately $200 million based on PFS estimates 4, and defers Hudbay's first capital contribution until 2028 at the earliest.

• Well positioned to advance Copper World towards a sanction decision in 2026.

◦ Feasibility study for Copper World is underway with expected completion of a definitive feasibility study ("DFS") by mid-2026.

◦ With this successful de-risking milestone at Copper World, Hudbay expects to accelerate detailed engineering, some key long lead items and other de-risking activities by advancing $20 million in growth capital expenditures to 2025 from future years, and is updating total 2025 Arizona growth spending guidance to $110 million from $90 million on a 100% basis.

Reinvesting in High-return Growth Initiatives to Further Enhance Copper and Gold Exposure

• Advancing high-return brownfield mill enhancement initiatives and greenfield copper projects to drive near-term and long-term production growth with $33.1 million in growth capital expenditures during the second quarter of 2025.

• Optimization efforts at Copper Mountain are focused on executing the planned accelerated stripping program and mill throughput improvement projects. The planned conversion of the third ball mill to a second SAG mill remains on budget and on schedule, with completion of the initial phase achieved on July 10 and ramp up of the final phase expected in the fourth quarter of 2025.

• Mining of first zinc ore from the exploration and haulage drifts at 1901 was achieved in the second quarter, and planned activities over the next two years are expected to de-risk the path towards full production in 2027.

• Large exploration program in Snow Lake continues to execute threefold strategy focused on near-mine exploration to increase near-term production and mineral reserves, testing regional satellite deposits for additional ore feed to utilize available capacity at the Stall mill, and exploring the large land package for a potential new anchor deposit to meaningfully extend mine life.

• Drilling commenced at the Talbot copper-zinc-gold deposit near Snow Lake as part of a large summer exploration program.

• Continuing to advance Flin Flon tailings reprocessing opportunities through metallurgical test work and economic evaluation to assess the possibility of producing critical minerals and precious metals in an environmentally friendly manner.

• Completed transaction with Mitsubishi Materials Corporation to consolidate Hudbay's 100% ownership of the Copper Mountain mine in a highly accretive transaction to further increase Hudbay's exposure to a long-life, high-quality copper asset in a tier-1 mining jurisdiction, resulting in an expected 200% increase in attributable copper production from Copper Mountain in 2027 compared to 20245.

• Permitting application for the New Ingerbelle growth project at Copper Mountain was accepted for review by the B.C. Major Mines Office in May and is proceeding through the Mine Review Committee review process.

• Continuing to enhance stakeholder engagement and advance additional metallurgical studies at the Mason copper project in Nevada.

Summary of Second Quarter Results

Steady production continued into the second quarter of 2025 with consolidated copper production of 29,956 tonnes and consolidated gold production of 56,271 ounces. Consolidated copper and gold production was lower than the first quarter of 2025 primarily due to the impacts of a temporary suspension of operations in Manitoba as a result of mandatory wildfire evacuation orders. Consolidated silver production of 814,989 ounces and zinc production of 5,130 tonnes in the second quarter of 2025 were also lower than the first quarter of 2025 for the aforementioned reason.

Cash generated from operating activities of $259.9 million increased compared to the same period in 2024 and the first quarter of 2025 as a result of higher gross margins driven by stable copper production, higher realized prices and positive working capital management with reductions in finished goods inventories and receivable balances. Operating cash flow before change in non-cash working capital was $193.9 million during the second quarter of 2025, reflecting an increase of $70.2 million compared to the same period in 2024 and an increase of $30.4 million compared to the first quarter of 2025. The increase compared to the second quarter of 2024 reflects the higher gold realized price during the quarter, strong operating cost performance and higher sales volume partially offset by higher cash taxes paid. The increase compared to the first quarter of 2025 was primarily the result of lower cash taxes paid, offset by lower gold and copper sales volume in Manitoba.

Second quarter adjusted EBITDA 1 was $245.2 million, a 15% decrease compared to $287.2 million in the first quarter of 2025 due to lower sales volume, partially offset by higher gold prices. Second quarter adjusted EBITDA 1 increased by 69% compared to $145.0 million in the second quarter of 2024 as a result of higher sales volume and higher realized gold prices during the quarter.

Net earnings attributable to owners in the second quarter of 2025 was $117.7 million, or $0.30 per share, compared to $100.4 million, or $0.25 per share, in the first quarter of 2025 and net loss attributable to owners and loss per share attributable to owners of $16.5 million, or $0.04 per share, in the second quarter of 2024. The increase in earnings compared to the first quarter of 2025 is the result of high gross margins from strong revenue growth on the back of stable copper production and higher realized gold prices. In addition, the quarter benefited from various non-cash charges for revaluation gain of closed sites reclamation provisions, and significantly reduced net finance expenses, among other items, more than offsetting the high mining and income tax expense experienced in the current quarter.

Adjusted net earnings attributable to owners 1 and adjusted net earnings per share attributable to owners 1 in the second quarter of 2025 were $75.5 million and $0.19 per share, respectively, after adjusting for various non-cash items on a pre-tax basis such as a non-cash $18.9 million foreign exchange gain, a non-cash gain of $13.8 million related to quarterly revaluation of Hudbay's closed site environmental reclamation provision, a $6.3 million mark-to-market revaluation gain on various instruments such as investments and share-based compensation, and a $1.2 million gain related to flow-through share expenditures, among other items. This compares to adjusted net earnings attributable to owners 1 and net earnings per share attributable to owners 1 of $0.2 million and nil per share in the second quarter of 2024 and $93.8 million and $0.24 per share in the first quarter of 2025. The sharp increase in adjusted net earnings attributable to owners 1 and adjusted net earnings per share attributable to owners 1 compared to second quarter of 2024 is for the same reasons discussed above for net earnings.

In the second quarter of 2025, consolidated cash cost per pound of copper produced, net of by-product credits 1, was $(0.02), compared to $(0.45) in the first quarter of 2025 as the Company continued to demonstrate industry-leading cost performance. The change from the first quarter was a result of lower by-product credits and lower production levels in Manitoba during the second quarter. When compared to the second quarter of 2024, consolidated cash cost per pound of copper, net of by-product credits 1 decreased by $1.16 as a result of higher by-product credits, higher production and stronger cost performance across all business units.

Consolidated sustaining cash cost per pound of copper produced, net of by-product credits 1, was $1.65 in the second quarter of 2025, compared to $0.72 in the first quarter of 2025. The increase was driven by planned higher sustaining capital expenditures and the aforementioned variance in cash cost. Consolidated sustaining cash cost was lower than $2.65 in the second quarter of 2024, primarily due to the same factors impacting consolidated cash cost and partially offset by higher sustaining capital expenditures.

Consolidated all-in sustaining cash cost per pound of copper produced, net of by-product credits 1, was $2.03 in the second quarter of 2025, higher than $0.97 in the first quarter of 2025 mainly due to the same reasons outlined above as well as higher corporate G&A from the revaluation of the Company's stock based compensation due to relative higher share prices. Consolidated all-in sustaining cash cost was lower than $3.07 in the same period in 2024 due to the same reasons outlined above as well as lower accretion and amortization of community agreements, partially offset with higher corporate G&A costs.

As at June 30, 2025, total liquidity was $1,050.2 million, including $625.5 million in cash and cash equivalents, and undrawn availability of $424.7 million under Hudbay's revolving credit facilities. Net debt 1 at the end of the second quarter was $434.1 million, marking a $92.0 million improvement from the first quarter of 2025 as a result of deleverging activities. Hudbay expects that the current liquidity together with cash flows from operations will be sufficient to meet the Company's liquidity needs for the year.

*Copper equivalent production is calculated using the quarter average LME prices for each metal.

1 Adjusted net earnings (loss) - attributable to owners and adjusted net earnings (loss) per share - attributable to owners, adjusted EBITDA, cash cost, sustaining cash cost, all-in sustaining cash cost per pound of copper produced, net of by-product credits, cash cost, sustaining cash cost per ounce of gold produced, net of by-product credits, combined unit cost, net debt, net debt to adjusted EBITDA ratio and free cash flow are non-GAAP financial performance measures with no standardized definition under IFRS. For further information and a detailed reconciliation, please see the discussion under the "Non-GAAP Financial Performance Measures" section of this MD&A.

2 Liquidity includes $625.5 million in cash and cash equivalents as well as undrawn total availability of $424.7 million under Hudbay's revolving credit facilities.

3 Average analyst consensus net asset value estimate for 100% of Copper World is approximately $1.16 billion as of August 12, 2025.

4 Based on the initial capital investment and the $3.75 per pound copper price used in the PFS published on September 8, 2023 with assumptions of approximately $145 million for pre-sanctioning costs, $230 million from the precious metals stream, $350 million from project-level financing and approximately $700 million from the joint venture partner earn-in, matching contribution and capital contribution.

5 Copper Mountain copper production comparison based on the mid-point of the 2027 guidance range compared to 2024 actuals.